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It is rare when a tax crime is so pervasive that it spawns a theatrical recreation of the crimes using A-list actors. However, that is exactly the impact the groundbreaking the Panama Papers investigation had on readers when it was published in 2016. Now, some of the actors that were named in this report are beginning to be convicted of tax crimes. The Tax Law Offices of David W. Klasing is here to discuss the details of the Panama Papers investigation and the legal consequences of that investigation for those involved in the tax crimes at issue.
The Panama Papers refers to the Pulitzer Prize-winning investigation that looked into matters of alleged international tax crimes that centered around a law firm based in the country of Panama. Despite having 35 offices across the globe, the law firm of Mossack Fonseca was not widely recognized. However, it would later be discovered that this law firm played a major role in the alleged facilitation of tax evasion and other tax-related legal violations.
The investigation spearheaded by the International Consortium of Investigative Journalists (ICIJ) uncovered that the firm started by Jurgen Mossack and Ramon Fonseca allegedly helped politicians, well-known celebrities, drug and arms dealers, and others increase their wealth by using tax havens. Journalists were tipped off by an unnamed whistleblower who provided over 11 million documents such as bank statements and passport photos that were used when engaging in questionable business dealings.
After these documents were released to journalists and a story on them was eventually published, many high-profile figures were arrested or forced to step down from their positions. For example, the Prime Minister of Iceland resigned, and the Prime Minister of Pakistan was eventually convicted for corruption.
Eventually, Mossack Fonseca would close its doors in 2017 amid the scandal. However, they maintain that they did not engage in any criminal activity. While the Panama Papers were released to the public in 2016, criminal investigations into the extent of Mossack Fonseca’s alleged actions continue.
Harald Joachim von der Goltz, 83, was the first U.S. taxpayer that was convicted in connection to the Panama Papers. Von der Goltz was convicted of wire and tax fraud, false statements, money laundering, and other related charges after pleading guilty. Von der Goltz was then sentenced to 4 years in prison for these offenses.
From 2000 to 2017, von der Goltz worked with Mossack Fonseca and other accountants and attorneys to evade taxes and hide his financial assets from the IRS. Prosecutors also presented evidence that von der Goltz involved other members of his family in his tax schemes. In total, the crimes of von der Goltz and Richard Gaffey, his accountant, caused the U.S. to lose over $4 million of tax revenue.
Von der Goltz was sentenced in 2021. The U.S. government has continued its efforts to prosecute those who were connected with the Panama Papers investigation, and there are likely many more convictions that will come in the future.
If you believe that you were exposed to criminal tax or foreign information liability as part of the Panama Papers investigation, reach out to a dually licensed International Tax Attorney and CPA as soon as possible to discuss your options to avoid prosecution or do damage control if that is not currently possible.
Note: As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed foreign information returns coupled with affirmative evasion of U.S. income tax on offshore income) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosurebefore the IRS has started an audit or criminal tax investigation / prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.
It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process. Only an Attorney has the Attorney Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.
Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.
As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, KovelCPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth. See our Testimonials to see what our clients have to say about us!
As mentioned, Richard Gaffey was a Massachusetts accountant who assisted Harald Joachim von der Goltz with various tax evasion schemes. Gaffey was the second U.S. taxpayer convicted due to the Panama Papers. In his case, Gaffey pleaded guilty to eight counts of tax crimes, including fraud and conspiracy to commit tax evasion.
It is alleged that Gaffey conspired with attorneys from Mossack Fonseca to avoid United States tax regulations over a period of decades. Gaffey was sentenced by federal judge Richard M. Berman to over three years in prison and was ordered to pay the United States $8.75 million in penalties.
Joachim Alexander von der Goltz is the third individual that pled guilty to tax crimes discovered through the Panama Papers. Joachim Alexander is also the son of Harald Joachim von der Goltz.
Joachim Alexander is accused of evading taxes by concealing his residence when operating an offshore shell company with foreign financial accounts. Initially, when the Panama Papers report was published in 2016, Joachim Alexander alleged that he was not aware that he was subject to taxes for possessing a foreign bank account. By December 2019, Joachim Alexander had pleaded guilty to counts of fraud, falsification of documents, and tax evasion.
For his role in the Panama Papers scandal, Joachim Alexander was sentenced to three years in prison and has currently paid over $230,000 in restitution to the United States.
There are still other actors that are wanted by the U.S. government for their tax evasion crimes. For example, Dirk Brauer and Ramses Owens, former attorneys at Mossack Fonseca, are still at large.
To know more about prosecutions stemming from the Panama Papers, contact our duly licensed International Tax Attorneys and CPAs.
The Panama Papers investigation and convictions should serve as a reminder that the U.S. takes tax crimes very seriously. With new regulations on the horizon, taxpayers who seek to evade taxes using a complex scheme of offshore banking and non-disclosed foreign entities and investments may find that they are quickly caught. If you believe that you will be (or are) the subject of a high risk foreign account audit or criminal tax investigation, contact the dually licensed International Tax Attorneys and CPAs at the Tax Law Offices of David W. Klasing by calling (800) 681-1295 or scheduling online HERE.
Regardless of your business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.
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